US and Chinese deputy trade negotiators are set to continue talks that began on Thursday in an effort to lay the groundwork for high-level discussions in early October that will determine whether the world's biggest economies can reach a trade deal. While tariffs and worries about protracted supply-chain disruption have hampered global business activity, the US economy is still faring relatively well, analysts said.
"The US economy is clearly doing better than anyone else," said Joseph Trevisani, senior analyst at FX Street in New York. "I'm still in the stronger dollar camp." With housing starts at a 12-year high and factory output rebounding in August, the longest US expansion on record seems to have more legs, he said. At 11:36 a.m. (1536 GMT), an index that tracks the dollar against a basket of six major currencies was up 0.31% at 98.58. It was on course to gain 0.3% on the week.
The euro fell 0.34% on the day at $1.1003, while the greenback slipped 0.11% to 107.935 yen. Against a favorable economic backdrop, the Fed lowered key lending rates by a quarter point on Wednesday, but signaled a higher bar to further reductions in borrowing costs. The pound was down 0.19% at $1.2498 after touching a two-month high at $1.2582. It reached a four-month high of 87.875 pence per euro before easing to 88.03 pence, up 0.11 on the day.